SEATTLE, WA -- Redfin, the next-generation real estate brokerage, today announced that U.S. homebuyer demand, an early indicator of housing-market performance, was up 13 percent year over year in June. This is according to the Redfin Housing Demand Index, which debuted today at a level of 113, with a baseline of 100 starting in January 2013. Although June demand is up compared to last year, it's a smaller increase than in previous months.
In 2015, the Demand Index followed a similar seasonal pattern to previous years, increasing from January to April, then beginning to decline. However, this year's 6.7 percent decline from May to June is steeper than the 3.9 percent decrease for the same period in 2014. The Demand Index is based on millions of visits to Redfin.com home listing pages, and thousands of Redfin customers requesting home tours and writing offers in 15 major metro areas.
Price and sales forecast
Redfin uses its demand data through mid-July and industry housing data from 15 major-metro areas1 to forecast changes in year-over-year home-prices and sales in the current month and one month ahead. Redfin forecasts that year over year, home prices will be up about 4.3 percent in July, and just 2.2 percent in August. Redfin expects the number of homes sold in July to grow by 14.3 percent year over year, and by 4.6 percent in August.
According to Redfin, this year's seasonal slowdown is more extreme than normal due to buyer fatigue over high prices and low selection, combined with gradually increasing mortgage interest rates. Buyers are still in the market, but they're setting boundaries on what they're willing to pay.
"Homebuyers in D.C. have reached their limit when it comes to price," said Dan Galloway, a Redfin agent in Washington, D.C. "As recently as May, offers $100,000 above list price were common, but home prices are now reaching a line that buyers will not cross."
Two major factors driving the forecasts are fewer people making offers and lower list prices for homes going under contract.
"Homebuyers are still touring in force, but they're more price sensitive," said Nela Richardson, Redfin chief economist. "Fewer are making offers, and when they do, they're buying less expensive homes. The median list price of pending homes fell by $10,000 to $300,000 in just the last two weeks."
The Redfin Housing Demand Index covers the following 15 metro-area markets: Atlanta, GA; Austin, TX; Baltimore, MD; Boston, MA; Chicago, IL; Denver, CO; Los Angeles, CA; Oakland, CA; Orange County, CA; Phoenix, AZ; Portland, OR; San Diego, CA; San Francisco, CA; Seattle, WA; Washington, DC.